THE MULTIBILLION DOLLAR RAFAEL SCAM?

The whole Rafael scam hinges on the average price paid and suppossed to be paid in the two deals The average cost per Jet is made by Ajai Shukla an experienced military analyst has done so here

It was divulged that the contracted price averaged out to Euro 91.7 million (Rs 686 crore) per Rafale aircraft. This included the purchase of 28 single-seat fighters for Euro 91.07 million (Rs 681 crore) each; and eight twin-seat fighters, each priced at Euro 94 million (Rs 703 crore). That puts the cost of each of the 36 “bare bones” fighters at Euro 91.7 million (Rs 686 crore) – totalling up to Euro 3.3 billion.

Besides this, the IAF paid Euro 1.7 billion for “India-specific enhancements”, Euro 700 million for weaponry like Meteor and SCALP missiles, Euro 1.8 billion for spare parts and engines, and Euro 350 million for “performance based logistics”, to ensure that at least 75 per cent of the Rafale fleet remains operationally available. All this added up to another Euro 4.5 billion, taking the cost of the contract up to 7.85 billion Euro .

Adding the Euro 1.7 billion for “India specific enhancements”, the payment made for the aircraft goes up to Euro 5 billion, averaging out to Euro 138.9 million (Rs 1,063 crore) per Rafale fighter.

A key question is: how much of the “additional costs” are actually part of the aircraft? Most aerospace industry executives agree the “India-specific enhancements” are a part of the Rafale operational platform and  should be included in its price.

While it is inadvisable to directly  compare two differently structured contracts – one involving manufacture in France and the other, manufacture in India with transfer of technology  – an apples-to-apples comparison can be made with Dassault’s pricing in the MMRCA tender that quotes for 18 fighters in “fly-away condition”.

Other than that, the only authoritative indicator of Rafale’s bid in the 126-fighter MMRCA contest has come from Manohar Parrikar, while he was defence minister. Talking to Doordarshan on April 13, 2015, he quoted a figure: “The Rafale is quite expensive. As you go into the upper end, the cost goes up. When you talk of 126 aircraft, it becomes a purchase of about Rs 90,000 crore.”

While this figure would include elements of technology transfer and manufacturing infrastructure creation, Rs 90,000 crore for 126 Rafales translates into an indicative cost of Rs 714 crore per fighter– significantly lower than what India is paying now.

“The most valid comparison is with 18 fly-away Rafales in the MMRCA tender. The government should make those figures public”, says an aerospace company executive.

Source Ajai Shukla’s Broad Sword How much did the Rafale actually cost?

Thus as per Ajai Shuklas analysis cost in the the two deals works out to 1063 crores per plane vs 686 crores per plane =a difference or loss  to the Indian Exchequer  of 377 crore per fighter jet

That works out to a difference of 13572 crores over the 36 fighters

But there’s another component to the scam The original deal envisaged HAL a fully owned Government of India company getting technology from Rafael and assembling 108 5th generation fighter jets

Now 50 percent of the offset clause of 22000 crores is going to be spent on private companies Since India doesn’t have any private defense companies but has very well connected business men all the offset contracts will willy nilly go to private parties with zero experience

Private businesses with zero experience gain priceless experience and unjustified profits with Public money Thus taxpayers monies line up private pockets These profits could be anywhere between half a billion to a billion dollars

THUS THE ACTUAL COST OF THE NEW DEAL IS WAT MORE THEN 13500 CRORES

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TIMELINE OF THE TWO DEALS

2007

Tenders for 126 Medium Multi Role Combat Aircraft (MMRCA) fighters are issued by India in 2007.  The competition is between the French Rafale, Russia’s MIG-35, the Swedish Saab JAS-39 Gripen, American Lockheed Martin’s F-16, the Boeing F/A-18 Super Hornet and Eurofighter Typhoon.

2012

Five years after the tenders were issued, Dassault emerges as lowest bidder. Of the 126 jets required, 18 fighters are to be imported “in a flyawaycondition”(i.e. having readied completion). Hindustan Aeronautics Ltd (HAL) will manufacture the remaining 108 jets with technological assistance from Dassault.

2014

March

The UPA government and French aerospace major Dassault sealed a work share agreement in what is being described as a big step forward, almost two years after negotiations began in the deal for 126 Rafale fighter jets to be bought by India. The French and Indian governments are also working on an agreement for a sovereign guarantee that Dassault will supply, service and maintain the Rafales over the next 40 years. NDTV

December

 The French and Indian defence ministers agreed on Monday to overcome any differences and finalise the sale of 126 fighter jets to India in a deal worth an estimated $15 billion, the Indian defence ministry said.On Monday, French defence minister Jean-Yves Le Drian met his Indian counterpart Manohar Parrikar, who was appointed defence minister last month.“Both sides agreed to take forward the strategic co-operation between the two countries. They discussed all issues including Rafale. It was decided that  whatever differences still existed would be resolved in a fast-track manner,” said Indian defense ministry spokesman Sitanshu Kar.Livemint

Manohar Parrikar an engineer by profession is a graduate of the prestigious IIT and has a reputation for honesty

2015

March

On 28/3/15 Anil Ambani registered Reliance Defence.

April

Prime Minister Narendra Modi said on Friday that the Indian government will purchase 36 Rafale fighter jets from of Dassault Aviation SA of France after years of disputing over the deal. The terms and conditions of the agreement have yet to be finalized, Modi said at a joint press conference with French President Francois Hollande. “Government of India conveyed to the government of France that in view of the critical operational necessity for Multirole Combat Aircraft for Indian Air Force (IAF), government of India would like to acquire 36 Rafale jets in fly-away condition as quickly as possible,” Modi and Hollande said in a joint statement.Mint Anil Ambani was present in Paris with the PM when the PM made that announcement  The deal comes with a 50% offset clause which means that Indian companies will get businesses worth over 3 billion euros or close to Rs 22,500 crores.

July 30

Modi government cancels the earlier RFP for procurement of 126 Fighter Aircrafts.

 WHAT CHANGED BETWEEN DECEMBER 2014 AND APRIL 2015 IE JUST 5 MONTHS THAT  CAUSED SUCH A CRITICAL OPERATIONAL NECESSITY ? THE OFFSET CLAUSE WHICH WILL BECOME THE RELIANCE CLAUSE ?

2016

India on Friday concluded an Inter-Governmental Agreement (IGA) with France for the purchase of 36 Rafale fighter jets at a cost of €7.87 billion, the first fighter aircraft deal since the purchase of Sukhois from Russia in the late 90’s.

The deal was signed by Defence Minister Manohar Parrikar and his French counterpart Jean Yves Le Drian. Eric Trappier, Dassault Aviation Chairman and CEO, was also present. The deal comes after 17 months of tough negotiations since Prime Minister Narendra Modi announced the decision in April 2015 for direct purchase of the jets in fly-away condition, citing “critical operational necessity” of the IAF.

 

2017

October

French company Dassault Aviation SA will invest €100 million (around Rs760 crore) in its joint venture with Anil Ambani’s Reliance Group to manufacture components for its aircraft. The joint venture’s production comes under the offset clause of the Rafale fighter jets deal signed by India and France last year. Under that agreement, France sold 36 Rafale jets to India for Rs 59,000 crore; in return, French companies involved in the manufacture of the aircraft have to invest 50% of the amount in India’s defence manufacturing ecosystem and making components locally.

“We expect…over a period of time, India to be the global manufacturer of Falcon aircraft,” said Ambani at the event. “Over a period of time, the entire aircraft will be made in India.”He said that the group expected other firms such as Thales SA, MBD Design and other international companies to locate their facilities in the Dhirubhai Ambani Aerospace Park.

Trappier of Dassault said that he had a target of selling about 1,000 Falcon jets over the next 10 years. He said that if the firm gets fresh orders for Rafale jets(apart from the 36 already ordered), then the  firm would consider assembling the aircraft in India.Livemint

The offset clause being 50 percent goes all the way up-to 22500 crores

Effectively a 78 year old Government owned firm HAL  with decades long experience in Defense manufacturing has been cast aside for a private firm which is owned by the Ambani family which is close to Modi and  has reportedly funded PM Modis campaign

The first future Fighter jets produced in India wont come from the publicly funded 78 year old HAL it will come from the 2 year old Reliance firm

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THE SELLERS OWNERS OF DASSAULT AVIATION

So who owns this Dassault  Aviation which is causing such a big political controversy ? The company was started by Marcel Dessault born Marcel Bloch Marcel Dassault (born Marcel Bloch; 1892 -1986) was a French aircraft industrialist. Bloch was born on 22 January 1892 in Paris.Both of his parents were Jewish.

While Rothschild owns “Left Wing” Newspaper the Libération – Dassault owns “conservative” daily Le Figaro All views covered

In 1919, Bloch married Madeleine Minckes, the daughter of a wealthy Jewish family of furniture dealers. They had two sons, Claude and Serge. Marcel Dassault died in Neuilly-sur-Seine, in 1986 and was buried in the Passy Cemetery in the 16th arrondissement of Paris. Serge Dassault, Marcel’s son, became CEO of Avions Marcel Dassault, which was restructured as Groupe Industriel Marcel Dassault, reflecting its broader interests. In 1990, the aviation division was renamed Dassault Aviation.

In Februrary 2017 Serge Dassault was convicted of money laundering and tax evasion and was fined 2.2 million Euros by a court in France

In October 2017  Dassault Aviation and two other French aerospace companies were fined a combined 227 million euros ($268 million) in Taiwan, settling what sources familiar with the case have described as a 25-year-old dispute over an arms sale. Warplane maker Dassault said it had been fined 134 million euros, while radar supplier Thales said it was due to pay 64 million and engine maker Safran said it accounted for 29 million. French arms firms fined 227 mln euros in Taiwan dispute

Transparency International, has ranked French company Dassault Aviation among the world’s least transparent defence companies, with the lowest monitoring of ethical violations and corruption. Transparency International has ranked Dassault Aviation in “Band F”, the lowest grading, alongside 56 other companies like Pakistan Ordnance Factories, King Abdullah II Design and Development, and a raft of Chinese and Russian arms companies.

When Narendra Modi Anil Ambani and Dassault Aviation got together ………………it would be surprising if a scam didn’t happen

DASSAULT SEEMS TO HAVE GOT AN EXTRA 1.7 BILLION EURO OR 2 BILLION DOLLARS OR 13000 CRORES UNDER THE GUISE OF INDIA SPECIFIC ENHANCEMENTS . IN RETURN AMBANI  WILL PROBABLY GET THE BULK OF THE 3 BILLION EURO OR 3.9 BILLION DOLLAR OR 23000 CRORES “OFFSET BONANZA”

 

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